Dive Brief:

• JPMorgan Chase gave CEO Jamie Dimon a 9.5% compensation boost Thursday — to $34.5 million for 2021, from $31.5 million the previous year.
• The pay breaks down to a $1.5 million base salary, $5 million in cash incentives and $28 million in performance share units, according to a bank filing. The first two figures are identical from 2020 — and 2019 (Dimon’s pay remained steady last year). The $3 million boost falls in the last category.
• The $34.5 million represents Dimon’s heftiest haul since 2008, according to the Financial Times, and would again make him the highest-paid CEO of the six largest U.S. banks — a title he has typically held. Dimon was surpassed last year when Morgan Stanley gave CEO James Gorman $33 million, after a 2020 in which that bank agreed to acquire E*Trade and Eaton Vance in separate deals worth a combined $20 billion.

Dive Insight:

Dimon has been outspoken thus far this year regarding the need to pay extra to retain the employees it wants. "It’s a lot of competition. And we intend to win. And sometimes that means you got to spend a few bucks," Dimon said last week during JPMorgan Chase’s fourth-quarter earnings call. "CEOs shouldn’t be crybabies about it. They should just deal with it."

Combined, JPMorgan, Bank of America, Citi, Goldman Sachs and Morgan Stanley handed out $142 billion in pay and benefits in 2021, a nearly 15% jump from the previous year, the Financial Times reported.

The nation’s largest bank last week defended its recent 11% jump in operating expenses, which it credited to compensation boosts. "It is true … that there’s a little bit of labor inflation, and it’s important for us to attract and retain the best talent and pay competitively according to performance," JPMorgan CFO Jeremy Barnum said.

The bank this week continued investing more in its talent — raising the starting salary for first-year investment bankers to $110,000, and bumping up second- and third-year base pay to $125,000 and $135,000, respectively.

Thursday’s move shows JPMorgan’s buy-in on that philosophy at the top of the pay scale, too. Daniel Pinto, the bank’s sole president, saw a 16% increase in 2021 from the year before, to $28.5 million, according to Reuters.

Jennifer Piepszak, who in May became co-head of the bank’s consumer and community banking unit, saw a 38% boost to $16.5 million. The division’s fellow co-head, Marianne Lake, saw a 5% jump to the same amount, the wire service reported.

Doug Petno, CEO of commercial banking, received 15% more, to $15 million.

Mary Erdoes, the bank’s asset and wealth management chief, proved an outlier. Her compensation dipped 2% to $20.5 million.

In disclosing Dimon’s compensation package, JPMorgan said it took into account short- and long-term performance on a number of fronts. The bank reported $48.3 billion in profit last year — 32.7% above its previous record of $36.4 billion, set in 2019, and 66% higher than 2020.

Banks’ earnings in 2020 were hampered by a rapid uptick in loan-loss reserves at the start of the COVID-19 pandemic — held in case consumers defaulted on loans. The pendulum swung the other way in 2021. JPMorgan released $9 billion of those reserves last year as those defaults, by and large, never materialized.

"Amid the continued challenges of COVID-19 and supply chain disruptions, under Mr. Dimon's stewardship, the Firm continued to serve its clients and customers around the world during a time of unprecedented business demands, while supporting and providing a safe work environment for its employees and investing in and executing on strategic initiatives," JPMorgan said Thursday in the filing.

The bank cited its return on tangible common equity of 23% — a major variable in Dimon’s performance share units — as well as record revenue, a shareholder dividend increase and the bank’s efforts to expand, including the launch of the digital banking operations in the U.K., a spate of acquisitions and branch openings that give the bank a presence in all 48 contiguous U.S. states.

The compensation boost comes in addition to a "special award" of 1.5 million share options JPMorgan gave Dimon in July. That perk, which could be worth about $50 million by 2031, was meant to reflect the board’s "desire" that Dimon "continue to lead the Firm for a further significant number of years."

The bank in December gave Pinto a similar award of 750,000 restricted share options as part of a "retention planning" strategy, it said.

The U.S.'s other Wall Street banks are expected to disclose their own executive compensation packages in the coming weeks.